An Amer­i­can free trade deal wouldn’t put Bri­tain first

Don­ald Trump’s most re­cent in­ter­ven­tion in the Brexit de­bate came as a sur­prise to many UK busi­nesses, who have en­joyed deep busi­ness ties to the US for years, if not decades. Mr Trump’s as­ser­tion that the UK “may not be able to trade” with the US if the Gov­ern­ment’s pro­posed Brexit deal is ap­proved is a com­ment that sim­ply doesn’t stand up to scru­tiny, given that Bri­tish busi­nesses al­ready trade more ex­ten­sively with the US than they do with any other sin­gle coun­try, even with­out a com­pre­hen­sive free trade deal.

Nor should Mr Trump’s in­ter­ven­tion de­flect West­min­ster and White­hall away from the UK’s most ur­gent trade pri­or­ity: se­cur­ing a good level of fu­ture mar­ket ac­cess to the Euro­pean Union and find­ing ways to re­tain pref­er­en­tial ac­cess to coun­tries from Canada to South Africa to Korea, where the EU has trade agree­ments that are well-used by UK firms.

Most UK busi­nesses tell us that they are cur­rently much more con­cerned with the real mar­ket ac­cess they could lose as a re­sult of Brexit – both in Europe and fur­ther afield – than they are about hy­po­thet­i­cal gains with part­ners like the US. While clar­ity and pre­ci­sion on the terms of Euro­pean trade are at the top of busi­ness’s wish list, that doesn’t mean Bri­tish firms are somehow un­in­ter­ested in grow­ing their pres­ence in the US mar­ket. Our own sur­veys make it clear that six in 10 Cham­ber busi­nesses want the UK gov­ern­ment to pri­ori­tise im­proved trade links with the US. The prob­lem, as ever, is a po­lit­i­cal one.

A fully-fledged, com­pre­hen­sive Free Trade Agree­ment be­tween the UK and the US is seen by far too many in West­min­ster as some sort of holy grail, a de­fin­i­tive and highly sym­bolic “an­swer” to the ques­tion of the UK’s fu­ture place in the world.

Yet the prospect does not sit as well with many in the busi­ness com­mu­ni­ties across the UK that I rep­re­sent.

While lib­er­al­is­ing trade with the US is a valu­able aim, an all-singing, all-danc­ing Free Trade Agree­ment should not be a UK pri­or­ity, at least in the short to medium term.

In­deed, a wide-rang­ing FTA could prove a dis­tinctly wor­ry­ing prospect for many UK ex­porters of both goods and ser­vices.

Un­like with many other na­tions, the UK en­joys a very sig­nif­i­cant trade sur­plus with the US, some­thing that could be put at risk the minute a cur­rent or fu­ture Prime Min­is­ter de­cides to send their ne­go­tia­tors to lock horns with the ex­pe­ri­enced Of­fice of the US Trade Rep­re­sen­ta­tive on the terms of a wider trade agree­ment. Hav­ing re­lied on the ex­pe­ri­ence and knowl­edge of the Euro­pean Com­mis­sion for decades, now is not the time for the new UK De­part­ment of In­ter­na­tional Trade to go head-to­head with the some of the most sea­soned pub­lic and pri­vate sec­tor trade ne­go­ti­at­ing ex­perts in the world.

The re­cent im­po­si­tion of tar­iffs on many of the US’s clos­est trad­ing part­ners – in­clud­ing the UK as a mem­ber of the EU – demon­strates that the Trump ad­min­is­tra­tion is se­ri­ous about a pro­tec­tion­ist, “Amer­ica First” ap­proach to in­ter­na­tional trade. No mat­ter how close our two coun­tries may be, the US ad­min­is­tra­tion’s start­ing point doesn’t po­si­tion the UK in a place to emerge as a big ben­e­fi­ciary from an FTA with the US.

The US also starts with an ob­vi­ous mar­ket size ad­van­tage, and in many cases lower reg­u­la­tory costs and re­quire­ments than busi­nesses in the UK, which US ne­go­tia­tors would try to use to their ad­van­tage in any trade talks. It’s also cru­cial to note that de­ci­sions taken as part of a US-UK FTA would pro­foundly af­fect the over­all course of fu­ture UK trade pol­icy – “lock­ing us in” to el­e­ments of an Amer­i­can trade and reg­u­la­tory model, just as the UK starts to move away from a purely Euro­pean one.

It makes no sense for the UK to es­tab­lish an in­de­pen­dent trade pol­icy upon leav­ing the EU, only to sig­nif­i­cantly re­strict that in­de­pen­dence from the out­set through a lop­sided deal with one of the world’s most pow­er­ful eco­nomic pow­ers. Much can be done, even out­side of a

‘Un­like with many other na­tions, the UK en­joys a very sig­nif­i­cant trade sur­plus with the US’

big po­lit­i­cal free trade agree­ment, to help UK and US busi­nesses do more to­gether. Bet­ter mo­bil­ity ar­range­ments be­tween the two coun­tries, im­proved tax treaties, and more cus­toms fa­cil­i­ta­tions that smooth the pas­sage of goods across bor­ders are all wor­thy goals for the Bri­tish and US gov­ern­ments to tackle to­gether.

So, it’s time for politi­cians on both sides of the At­lantic to pull back on the rhetoric, and take a clear-eyed look at what prac­ti­cal steps we can take to boost the hugely-suc­cess­ful trade re­la­tion­ship be­tween the UK and the US.

At­ten­tion to the small de­tails – not grand state­ments and big sign­ing cer­e­monies – is what will make busi­ness, trade and in­vest­ment flow, no mat­ter the fi­nal out­come of the Brexit process.